Also: The expense recognized is Not 400,000 or 480,000

Computing Income Statement Effect of Revenue Recognition on Long-Term Construction Contract On January 1, BuilderOne Inc. enters into a contract with a customer to redesign and update an office building for a price of $2,400,000. The construction is estimated to take three years at a total estimated cost of $2,000,000. Costs incurred during the year total $400,000. Determine the revenue and expense amounts to be recognized in the income statement during the year assuming that the company appropriately recognizes revenue at a point in time